Altera Message Board - Msg: 206935

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Technology Stocks : Altera

ALTR 53.61

+1.3%

Jul 7 5:00 PM EST

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To: Geof Hollingsworth who wrote (378)	8/5/1996 12:10:00 PM
From: Tom Todd	of 2389

Geof: You need to be careful... when looing at inventory levels. When the inventory was very low, they were in a period of allocation - a semiconductor industry term for sold out. In such periods inventories are very low, and backlogs swell, due to long leadtimes and sometimes due to double ordering. As supply and demand equalize, backlog decreases as customers wait longer to buy, and inventories increase. While 205 days is a bit high, 93 days is below where they would optimally run the business I suspect. A more meaningful comparison would be to go back several quarters to a period of relative stability in supply/ demand to see what the inventory levels were then. As for my investment opinion I have seen ALTR as a hold during both the decline and the run up these past two months. A bit more visibility into the Q3 bookings rate and some reassurance to the analysts vis-a-vis Q3 EPS will make me more confident in further buying. If however you can stand a little downward swing before rising to more historical highs, now is not a bad time. In yrs past (ignoring the anomolous 1995), Wall Street has waited until well into Sept. to declare the semi industry OK, so hold on... -tt

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